The Chief Executive Officer of Nigerian Breweries Plc, Hans Essaadi, has revealed that the economic situation in Nigeria has worsened to the extent that citizens can no longer afford to buy beer.
Essaadi made this revelation recently at the company’s investor call after the release of its 2023 results.
Essaadi said: “It has been an unprecedented year for our business in Nigeria. We saw a significant decline in the mainstream lager market as a result of Nigerian consumers no longer able to afford a Goldberg after a hard day’s work.”
Nigerian Breweries recorded N153bn foreign exchange loss due to the devaluation of the naira for the year ended December 2023.
For the period under review, Nigerian Breweries grew its revenue by 8.9 percent to N599.64bn from N550.64bn. Net finance expense increased by 449.7 percent to N189.19bn, dragging the company to a loss of N106.31bn, from a gain of N13.19bn in 2022.
In comments that accompanied the financial results, the NB Board of Directors said: “The Nigeria business landscape experienced significant shifts in 2023 with substantial impact on businesses and livelihoods nationwide. The redesign of the naira notes which resulted in cash shortage that severely hampered social and economic activities nationwide set the tone for a turbulent year.
“High double-digit inflation rates (with food inflation at more than 30 per cent), removal of subsidy on premium motor spirit (fuel), devaluation of the naira, and foreign exchange scarcity further exacerbated the already difficult environment for the populace and businesses.”
He added that despite the difficulties, “The company was able to grow its revenue by nine percent compared to the previous year aided by a positive price mix. However, the operating profit fell by 15 per cent due to higher input cost and one-off reorganization costs despite strong and aggressive cost savings and other efficiency measures. Coupled with the impact of the devaluation of the naira which resulted in a foreign exchange loss of N153bn, the Company recorded a net loss of N106 billion during the year.”
The Board stated its preparedness to tap into its decades of experience of operating in Nigeria to pull through the current macroeconomic headwinds.
The Board said: “In a difficult operating environment, the board will ensure that the company builds on its more than 77 years experience of operating in Nigeria to cope with current realities. The company will continue to be resilient and forward-thinking leveraging our broad portfolio, strong supply chain footprint and passionate workforce to drive long-term value creation for its shareholders and other stakeholders.”
